When buying a property, most people focus first on a single figure: the purchase price. Understandable, since it's the headline number in every listing. But anyone who only has that sum in mind is often in for an unpleasant surprise at the notary appointment. Depending on the federal state (Bundesland) and the specific circumstances, closing costs can account for a significant chunk of the budget – and they usually have to be paid out of your own funds, since banks typically won't include them in the financing. So it's worth taking a closer look.
Closing Costs at a Glance
Three major items make up the closing costs: the Grunderwerbsteuer (real estate transfer tax), notary and land register fees, and, if an agent was involved, the estate agent's commission. On top of that come smaller expenses that are easily forgotten. Altogether, depending on the federal state and the specific case, buyers should expect a noticeable mark-up on the purchase price, which needs to be planned for as part of the equity.
Grunderwerbsteuer (Real Estate Transfer Tax): The Biggest Item – and Highly Location-Dependent
The Grunderwerbsteuer is set individually by each federal state, and the differences are substantial. Bavaria and Saxony traditionally sit at the lower end with 3.5 percent. At the other end of the scale are states such as North Rhine-Westphalia, Brandenburg, Saarland and Schleswig-Holstein, at 6.5 percent. Berlin sits at 6 percent. In concrete terms, this means that for the same purchase price, you'll pay considerably less transfer tax in Dresden than in Berlin or Duisburg. Since the rates can change politically, it's worth checking the current rate for the relevant federal state shortly before the notary appointment, rather than relying on figures from an old source.
The tax is calculated on the notarised purchase price and is due within a few weeks of receiving the tax assessment, usually before the change of ownership is even entered in the Grundbuch (land register). Without proof that the transfer tax has been paid, the tax office won't issue the Unbedenklichkeitsbescheinigung (tax clearance certificate) – and without that certificate, there can be no entry in the land register. Anyone who cuts it too fine here ends up delaying the entire purchase process.
Notary and Land Register Fees: Mandatory, but Predictable
A property purchase in Germany isn't legally valid without notarisation by a Notar (notary) – this is a legal requirement that ultimately protects both parties. Notary fees are based on the Gerichts- und Notarkostenordnung (Court and Notary Fees Act) and are therefore tied directly to the purchase price; they're regulated uniformly nationwide and aren't negotiable. Together with the fees for registering the change in the land register, this item usually amounts to around 1.5 to 2 percent of the purchase price. This covers the notarisation of the purchase agreement, the Auflassungsvormerkung (priority notice of conveyance), the registration of the Grundschuld (land charge) for the financing, and the actual transfer of ownership.
At first glance, these costs look like a pure expense, but they're actually your safeguard: the notary reviews the contract from a legal standpoint, points out risks, and ensures that payment and transfer of ownership proceed cleanly, step by step. You won't find this kind of independent oversight more affordably anywhere else in the property purchase process.
Estate Agent's Commission: Who Actually Pays What?
Since the end of 2020, a clear rule has applied to the sale of residential property to private individuals: if the seller engages the agent, the buyer can be asked to cover a maximum of half the commission, and the seller must demonstrably pay their own share. In practice, this has established the classic 50/50 split. The total commission varies by region and usually falls somewhere between three and seven percent of the purchase price plus VAT, split between both parties. The exact amount depends on the federal state, the property, and the agreement between the seller and the agent.
Important to know: this rule only applies if both parties – buyer and seller – engage the same agent, or if the agent acts for both sides. Separate agency agreements can lead to different arrangements. If you're unsure how the commission breaks down in a specific case, it's best to clarify this early on, ideally before a viewing even takes place. For our properties, we disclose the commission arrangement transparently so there are no surprises later on.
What Buyers Often Underestimate
Beyond the three major items, there are smaller expenses that still add up. These include an independent survey if there are doubts about the building's condition, the cost of the move itself, any brokerage fees for arranging follow-up financing, and initial invoices from tradespeople, since hardly any property is moved into without some adjustments. For condominiums, there's often an additional special levy or a reserve fund for upcoming renovations to the shared facilities – something worth checking in the most recent minutes of the Eigentümerversammlung (owners' association meeting).
Budget Realistically Instead of Facing Nasty Surprises
As a rough rule of thumb that has proven reliable in practice, buyers should budget a total mark-up of around 10 to 15 percent on the purchase price for transfer tax, notary, land register, and agent's commission combined – though the exact figure depends heavily on the federal state and the commission arrangement. This amount should be available as equity, on top of the purchase price itself, which the bank typically finances. Planning for this from the outset avoids stress right before the notary appointment and allows you to negotiate more confidently, since you know exactly what you can actually afford.
This is exactly where experienced guidance pays off. We go through the actual costs for the specific property and federal state together with our clients before any offer is submitted. That way, there are no surprises, and you know from the very start what budget you really need to plan for. You can find out more about our purchase support through to the notary appointment on our website.
L&B Immobiliya at Your Side
Since 2009, we have been guiding buyers throughout Germany through the entire purchase process, in German, English and Russian, including remote purchases for international buyers. If you'd like to know exactly what closing costs to expect for your specific project, just get in touch – you'll find contact details for our team here.
